from the are-they-serious dept

Today in the House Judiciary Committee, they're holding hearings concerning cell phone unlocking, focused specifically on Rep. Goodlatte's proposed bill, which actually seems to be the weakest of all the proposed bills. It doesn't offer a permanent fix. It doesn't fully tackle the problem. Actually, it barely tackles the problem, and serves only to punt the issue down the road. That is, it would "repeal" the rejection of the exemption to the DMCA for cell phone unlocking by the Librarian of Congress (if you don't recall, the whole fight is because the DMCA ridiculously makes it illegal to circumvent "technology protection measures" even if the reason has nothing to do with infringing on someone's copyright, but every three years, the Librarian of Congress gets to issue "exemptions"), but would allow the Librarian of Congress to revisit the issue at the next triennial review. It does nothing to address the actual problem, which is a ridiculous and broken anti-circumvention clause, section 1201 of the Copyright Act.

The hearing has four witnesses... and all are more or less lining up behind Goodlatte's weak bill, some for better reasons than others. A few others haven't been invited to speak, but have submitted written testimony as well. I'll cover the remarks of the four speakers going in order of "reasonable" to "ridiculous" followed by two of the interesting written submissions.

First up, is testimony from George Slover of Consumer's Union. He highlights, correctly, how important mobile phone unlocking is for consumers, and points out that it's a demonstration of "the harm the anti-circumvention provisions of the Digital Millennium Copyright Act (DMCA) are causing consumers." He also points out that this issue should be a reason to explore more deeply the role of the anti-circumvention provisions found in Section 1201. He does offer a qualified support for the bill, but lists out a bunch of other changes that he thinks really should be added to the bill, to further allow consumer freedom and innovation around unlocked phones to thrive. The basic rights of consumers is important, and Slover definitely highlights that.

Next up, is testimony from Steven Berry from the Competitive Carriers Association, who have also been fighting hard to allow phone unlocking. There, the message is obvious. The competitive carriers provide greater innovation in terms of business models, service plans, etc., but much of that is enabled by allowing unlocking of phones, so users can switch from big network providers to a competitive carrier, without having to buy a new phone. This testimony focuses on the importance of unlocking specifically, and doesn't touch on the bigger issue of fixing the anti-circumvention provision. It's narrowly focused.

Then we get to testimony from Mike Altschul from CTIA, which is basically the trade group for the big mobile carriers. Their argument is basically "hey, we let you unlock your phones if you ask, so there's no need for this exemption." It claims, ridiculously, that carriers need to "lock" their phones so they can provide subsidies to make phones cheaper. But that's clearly not true. Carriers that subsidize their phones also have contractual early termination fees, which solve the subsidy issue, so the claim that they need the locks to protect the subsidies makes no sense. They already have the ability to do so contractually -- and they use it. There's no need for them to rely on digital locks and a broken copyright law to further protect something they already have through contract. Furthermore, the argument that they already allow unlocking is simply not correct. They allow unlocking in certain situations, but not all, and people have run into issues such as when travelling abroad, and just wanting to put in a foreign sim card.

And, finally on the spoken testimony, we come to testimony from Steve Metalitz. Metalitz is the MPAA and RIAA's go to guy for writing the laws they like in DC. ACTA, SOPA, TPP have his fingerprints all over them, and he's the epitome of an extreme maximalist. There's nothing about greater copyright protection that he finds problematic, and he always supports expansions. I have no idea why he's a witness at this panel, since he has nothing to do with phone unlocking, and while he has advocated for the MPAA/RIAA's extreme interests during DMCA exemption reviews, he officially took "no position" on cell phone unlocking.

His testimony is basically a spirited, ridiculous, and flat-out misleading "defense" of Section 1201 and the anti-circumvention provisions of the DMCA, which he seems to credit as being the reason why we have any entertainment at all online today. He claims that 1201 is "one of the most critical provisions" and says that it, specifically, has been "critical" (he likes that word) to the entertainment industry embracing the online world. This is wrong. First, the industry was dragged kicking and screaming into the online world, not willingly. And the anti-circumvention provisions have been nearly entirely useless in protecting their works, nearly all of which are available DRM-free from unauthorized sources. On the music front, they've already ditched DRM, and others will likely follow.

Metalitz then claims that 1201 is critical to the success of cloud computing, which is also wrong and ridiculous. It's wrong because what protects cloud computing is not copyright law, but good computer security. If cloud providers are hanging their hat on a copyright infringement claim if someone breaks into their network, they're doing it wrong. It's also ridiculous, because it tries to pretend that the tech industry is supportive of section 1201, when many find it quite problematic.

After that, he points out that 1201 was such a good idea that "scores of other countries have followed." What he leaves out is that those "scores of other countries" were pressured by the US government, in large part because of international treaties that (oooh, look at that) were strongly "supported" by Metalitz. It's quite a feat to claim that other countries supported your idea when they did so under pressure from the US government, using points highlighted by the RIAA/MPAA's own representatives.

When it came to written testimony, we'll highlight two key ones. First is from the Library Copyright Alliance, which says what really needed to be said: that section 1201 of the DMCA is ridiculous, broken and in need of real reform:

Most significantly, the Section 1201 rulemaking is an exercise in legal theatre. All
the parties to the rulemaking—those seeking an exemption, the rights holders, and the
Copyright Office staff--acknowledge that it is unclear whether the rulemaking has any
practical effect. This is because Section 1201(a)(1)(C) authorizes the Librarian of
Congress to adopt exemptions to the Section 1201(a)(1)(A) prohibition on the act of
circumventing a technological protection measure (TPM), but not to the Section
1201(a)(2) prohibition on the development and distribution of the technologies necessary
to perform the circumvention. In other words, after receiving an exemption, a person
might be legally permitted to perform the act of circumvention, but might have no lawful
way of obtaining the technology necessary to perform that act.

Similarly, all the parties understand that what occurs inside the hearing room has
no connection to the world outside it. In the last three rulemaking cycles, LCA has joined
with other groups in seeking exemptions for educators and students to circumvent the
TPMs on DVDs for the purpose of making educational uses of film clips. The rights
holders know that the uses we seek will not harm their market in any way. They also
know that whether the exemption is granted or rejected will have absolutely no impact on
the level of infringement. This is because the technology necessary to circumvent the
TPMs on DVDs is widely available on the Internet and easy to use. Nonetheless, the
rights holders reflexively oppose the exemption or seek to narrow it so that it would be
unusable. As a result, the discussions in the rulemaking descend into hyper-technical
issues such as the quality of video necessary for effective pedagogy in different kinds of
courses.

Moreover, in two rulemaking cycles, witnesses from the Motion Picture
Association of America (MPAA) demonstrated how a person could camcord a film off of
a high definition television. MPAA was attempting to show that a relatively high quality
recording could be made without circumventing a technological protection measure.
What it succeeded in proving, however, was the contradiction underlying its position. If
one could obtain a high quality copy without circumvention, why use technological
protection measures in the first place, and why should their circumvention be unlawful?
Moreover, the MPAA was demonstrating how to camcord a film precisely at the same
time it was asking Congress, state governments, and foreign legislatures to impose
criminal penalties on camcording.

There's more to it, but that's a good snippet. It's a shame that this more detailed view wasn't included as a part of the actual hearing.

Similarly, we've got Derek Khanna's submission which he discussed here yesterday. Khanna's submission, alone among all of the testimony, actually delves into the details of what the actual problems are and how allowing people to actually own what they buy (what a concept!) is a good idea for consumers, for innovation and for business. It's fairly comprehensive, and again, his voice would have been quite a useful addition to the actual hearing.

Banning technologies is an extreme step by government, a truly incredible reach of
Federal power, and I would petition this body to be very careful in continuing to delegate the
authority of what technologies to ban to a quasi-regulatory agent when, in these and many other
circumstances, there is no compelling governmental interest.

This legislation, as currently crafted, does not reflect the input of the White House,
former FCC Chairman, FCC Commissioner, scholars or outside groups such as R Street and
FreedomWorks. Our campaign was about actually solving this problem and restoring a free
market. Minor changes to this legislation would ensure that H.R. 1123 actually solves the
problem it intends to address by permanently legalizing unlocking and allowing for businesses to
sell the technology to consumers. Overall, our contention is that given the enormous benefits that
phone unlocking provides to the consumer, phone unlocking should be made permanently lawful
for the consumer to use, industry to develop and marketers to sell.

Hopefully, Congress will recognize that punting this and pretending there's nothing wrong with section 1201 is the wrong way to go, but given the situation, it doesn't seem like those in Congress are even open to considering that issue at this time.

from the ridiculous dept

We've always had our concerns about the ridiculous DMCA "exemptions" process concerning circumvention of digital locks. If you don't know, the DMCA has a strict anti-circumvention rule that says breaking digital locks, such as DRM, is itself a violation of copyright law, even if the purpose of the lock-breaking does not infringe on anyone's copyright. As a sort of "pressure valve" every three years, people can "apply" to the Librarian of Congress for exemptions to that rule. This, of course, is completely ridiculous and backwards. We need to apply, once every three years, to use legally purchased products the way we want to without it being considered illegal? That's crazy. But it's the way things are set up, and it can lead to some bizarre scenarios. As we explained last year when the latest round of exemptions was announced, the Librarian of Congress took awaythe exemption for unlocking your phone... but provided a 90 day window.

That window ends on Sunday. In other words, unlocking your phone on Saturday: legal. Unlocking your phone on Sunday: you probably just broke the law. As the EFF properly notes, this is not what copyright law is supposed to be about:

"Arguably, locking phone users into one carrier is not at all what the DMCA was meant to do. It's up to the courts to decide."

I don't even think there's anything "arguable" about it. Copyright law has no business being involved in deciding whether or not my phone can be unlocked. It's silly that this is an issue. It's silly that there needed to be an exemption in the first place. And it's silly that this exemption is being taken away. It's for things like this that people lose respect for copyright law.

from the why-do-we-let-this-happen? dept

As mentioned, it looks like Canada's new copyright law will include the "digital locks" provision, which is more accurately described as giving Hollywood a veto on any technology it doesn't like. If you haven't followed the specifics, the "digital locks" provision is an anti-circumvention rule that makes it against the law merely to break a "digital lock" (i.e., to route around any form of DRM, no matter how weak) even if (and this is the important part) you are breaking the digital lock for perfectly legal reasons. For reasons that I still cannot comprehend, Hollywood has insisted that anti-circumvention provisions -- even if there's no infringement -- are of utmost importance. If it was really about protecting against infringement, they would make it clear that the anti-circumvention provisions only apply in cases where copyright law is broken.

The real reason why they want anti-circumvention even when there's no copyright infringement is because it gives them a veto on any new technology. All they have to do is put in some sort of weak digital lock and suddenly the company has to "negotiate" a deal or they can be sued out of existence.

This is not theoretical. In fact, we now have yet another very real example of Hollywood's ability to kill a technology that only has legal uses thanks to the absolute nature of the DMCA's anti-circumvention clause (on which Canada's law was modeled). We've written about Kaleidescape a few times in the past. The company makes super high end DVD jukeboxes, that allow people to take the DVDs they own and store digital copies on a home (not internet-connected) server, to make it easier to watch those movies. The company has gone to amazing lengths to prevent its product from being used for infringement. Here, I'll let the company explain the details directly:

Kaleidescape has carefully designed its products to protect the rights of content owners. The hard-disk copy of each DVD retains all of the DVD CCA's scrambling and adds more encryption. The Kaleidescape System is a closed system that prevents DVDs from being copied to the Internet, to writable DVDs, or to computers or mobile devices. Furthermore, you cannot download a pirated movie from the Internet to a Kaleidescape System.

Every Kaleidescape customer must agree to copy only the DVDs that he rightfully owns, and must reaffirm this agreement upon copying each DVD. Kaleidescape Systems identify rental discs and prevent them from being imported. This combination of business practices and technology has been so effective that after years of searching for evidence that Kaleidescape's customers use their systems to steal content, the DVD CCA admitted in writing that Kaleidescape has done no harm to any of the motion picture studios, and was unable at trial to show any harm to the DVD CCA itself.

At one point, the company even went to such ridiculous extremes that it required users to put the DVD in the jukebox any time it wanted to play a movie from it -- effectively taking away the device's entire purpose, just to appease Hollywood.

And, none of it mattered. A court has issued an injunction against Kaleidescape selling these devices (pdf and embedded below). The specifics of the case revolve around questions of whether or not Kaleidescape breached the specific CSS license agreement that covers the DRM found on DVDs (which, again, Kaleidescape not only retains but enhances in its product). But that license agreement only has force because of the anti-circumvention provisions of the DMCA.

In other words this product, which can only be used for legal means -- and for which there has been no proof presented (ever) that it was used to infringe -- has been killed by a court... thanks to Hollywood's veto on this technology.

And the amazing thing is that all this does is make things worse for Hollywood. Considering how much Hollywood has been whining about DVD sales falling lately, a device like this only serves to make DVDs more valuable, meaning they would sell more.

Kaleidescape was founded in 2001 to bring consumers a fantastic experience for enjoying their movie collections. The Kaleidescape movie server makes digital copies of DVDs and Blu-ray Discs to hard disk drives so families can play back their movies instantly from any room of their home. A movie starts directly from the beginning, without forcing the family to endure advertisements, trailers, and confusing menus. With the company's wide-ranging innovations, customers can jump directly to the greatest scenes and songs in movies and concerts, and small children can start their movies all by themselves.

[....]

Over the years, Americans have amassed over 13 billion DVDs and Blu-ray Discs – about 110 per household. This means that many American families have a few thousand dollars tied up in a library of movies they hoped to enjoy over and over. However, with collections that size, families soon realize that it takes so long to find what they're looking for that it just isn't worth buying more discs. This frustration has led to a well-publicized 58% decline in revenues from the sale of DVDs since 2006.

The Kaleidescape System eliminates that frustration. Because it's so easy and fun for Kaleidescape customers to enjoy their movies, they start buying movies again, and with a bigger appetite. The average Kaleidescape family owns 506 movies on Blu-ray and DVD.

But thanks to digital locks and anti-circumvention rules, such a product got voted out of existence by the very industry it would help the most.